Flight Centre: Analyzing the Micro Environment in Marketing

This report provides a comprehensive analysis of the micro environment factors impacting Flight Centre, a major travel agency. It identifies key elements such as competitive rivalry, the bargaining power of buyers and suppliers, and the threat of substitutes. The report explores the challenges faced by Flight Centre, including decreased productivity and operational closures due to the COVID-19 pandemic, and suggests potential solutions like employee training and development, and awareness programs. The conclusion emphasizes the importance of understanding the micro environment for effective decision-making and improved profitability, especially in the context of changing market conditions.

Marketing

Table of Contents
INTRODUCTION .....................................................................................................................3
MAIN BODY ............................................................................................................................3
Micro environment.................................................................................................................3
Challenges and solutions to minimise the impact of micro environment factor....................4
CONCLUSION .........................................................................................................................5
REFERENCES ..........................................................................................................................6

INTRODUCTION
Micro environment factor can be defined as those are factors which are related to
internal environment of the organization (Rowley, 2016). These factors impact the
organization directly. In context of the current report, study on Flight Center. It is largest
retail travel agent in Australia, where it also provides its services in New Zealand, United
States, Canada, United Kingdom, South Africa, Hong Kong, India, China, Singapore, United
Arab Emirates, and Mexico. It was started in 1982 by Graham Turner and Geoff Harris. In
relation to the current report there is scanning of internal environment within Flight Center's .
Different challenges and impacts will be identified with some suggestion to improve the
functioning.
MAIN BODY
Micro environment
Micro environment can be defined as an environment which consists of internal
factors which impact the organization in a direct way. In context of Flight Centre, it is
operating in chain within Australia where company cover a large section of market. In
relation to this there is various kind of micro environment factor which impact the
organization internally and has to be managed by the manager to improve functioning. Some
of these factors are discussed below:
Intensity of competitive rivalry: This is a primary element within the micro
environment of organization which impact the performance and business function of
organization in direct manner. Under this function, it includes all the elements which are
related to the number of participants are the companies in a similar business to the
organization and can affect competitiveness within the industry (Chaffey and Smith, 2017).
Industrial rivalry affect the organizations presents in cost of products restrictions by
government trade Union and many more. In relation to the current business environment of
Flight Centre, there is large number of competitive rivals within the market. Due to this
organization has to use effective policies and strategies to eliminate the competitors by being
a cost effective a product differentiation organization. In relation to this, Flight Center is
using different calls of flights which are related to each part of economy and provide large
number of facilitates in comparison to is competitors in market.
Threats of new entrants: under this micro environment factor, the threat of new
entrants within the industry will be covered. In present time, after the COVID crisis, this
thread to the Flight Center get minimize. This is because, industry require high level of
investment and in current time due to unstable economy it is impossible to implement
investment within the firm and new business for a player within Australia. Therefore, this
factor impact positively on the organization because there is no threat of new entrants within
the industry where organization can maintain profitability (Baker and Saren, 2016).

Bargaining power of buyers: This is also a major micro environment factors which
impact on the organization directly, under this factor organization has to check the bargaining
power of buyers in the market so that it can take effective decisions according to it. In context
of Flight Center, it is operating in chain where it covers a large market within the Australia.
This makes it easier for the organization to reduce the bargaining power of customers because
of large number of customer to the organization. In impact positively on the profitability of
the firm because form can charge better prices because of large number of customers and low
bargaining power. This will also help me to the famine managing its functions because of
single retailer within the market.
Bargaining power of suppliers: Under the factor of micro environment organisation
has to identify the current bargaining power of suppliers so that it can manage the cost of
inventories and can perform more cost effectively within the market. Under this system,
bargaining power of suppliers will impact negatively to the organisation if it is high. In
context of Flight Center, the bargaining power of suppliers in relation to organisation is low.
This is because there are large number of supplier to the moon worth where company can
easily but again for the credit period as well as cost price of the products. Organisation in
managing its function can achieve and profitability because of low cost of purchase and better
credit period (Wirtz and Lovelock, 2016).
Threat of substitute: Under this micro environment factor, it includes all the
competition from the other industry which produces similar products and services with the
organization. In relation to Flight Center, threats of substitute are comparatively high within
the industry where organization is trading. Due to impact of globalization, there are various
functions which have to be performed by the firm and a related to current market situation
which attracts large number of organization within the economy of Australia. This is
impacting on the organization in increasing the threats of substitute in the market for Flight
Center.
It can be evaluated from the above that there are various factors which are related to
the micro environment. It is important for organization to identify these factors.
Challenges and solutions to minimize the impact of micro environment factor
Decrease in productivity: Decrease in productivity of workforce is a major challenge
which has to face due to impact of micro environment factors in organization. In context of
this, organization can use functions which are helpful in improving the productivity. These
are Training and development of employees, increasing motivation and improving flexibility
and working structure. This will help in boosting morale of employees and will impact on
productivity in positively (Berkowitz, 2016).
Closure of operations: Biggest challenge in current time where there are number of
stores and chains of organization which has to be closed because of covid-19. Due to covid-
19 there is continuous decrease sale of products which impact negatively on the profitability.
Because of this, Flight Center has to set some of its stores which are non-productive. For
improving the function, organization can use programs which are related to spreading

awareness about covid-19 and minimizing its impact on the organization by selling the
product and services required in this pandemic period (De Mooij, 2019).
CONCLUSION
It can be concluded from the above mentioned report, there are various kind of micro
environment factors which are important for the firm to be analyzed. This will help in
managing functions taking decisions according to the current situation of covid-19 and its
impact on the firm. Identification of micro environment factors will also lead to improving
profitability level.

REFERENCES
Books and Journals
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.
Berkowitz, E.N., 2016. Essentials of health care marketing. Jones & Bartlett Learning.
Chaffey, D. and Smith, P.R., 2017. Digital marketing excellence: planning, optimizing and
integrating online marketing. Taylor & Francis.
De Mooij, M., 2019. Consumer behavior and culture: Consequences for global marketing
and advertising. SAGE Publications Limited.
Rowley, J., 2016. Information marketing. Routledge.
Wirtz, J. and Lovelock, C., 2016. Services marketing: People, technology. World Scientific
Publishing Company.